You have definitely seen scenes like this on market charts: Bitcoin struggles with immense effort to squeeze out a 1% increase, requiring hundreds of billions of dollars to push the price; turn around and look at those "cheap" coins priced at $0.000x, which can see a 50% or even double, 5x, 10x gains within hours, making such massive increases seem almost effortless.

This stark contrast may seem bizarre, but it’s not magic or luck. The real answer is hidden in something most retail investors overlook — market capitalization, or market cap.

**Market Cap and Price: A seemingly simple formula with hidden truths**

The calculation of cryptocurrency market cap is actually straightforward: Market Cap = Single Coin Price × Total Circulating Supply. The formula is so simple it’s almost trivial, but that’s where the key lies.

Let’s look specifically. How much is Bitcoin worth now? Suppose it’s $50,000 per coin, with a circulating supply of about 19 million coins. Then the market cap is $50,000 × 19 million, which equals $950 billion. What does it mean if Bitcoin rises by 10%? It means that nearly $100 billion of capital needs to flow in to withstand selling pressure and push the price higher. What kind of concept is that? The global annual GDP is roughly in the trillions, so to push Bitcoin up by 10%, the capital required is an astronomical figure. Just think about how difficult that is.

**Low-priced coins are a different world**

Now, look at low-priced coins from another perspective. Suppose a certain cryptocurrency is priced at $0.0001, with a circulating supply of 10 billion coins. Its market cap would be $0.0001 × 10 billion, which equals $1 million. Imagine that — only $1 million in market cap.

To increase this coin from $0.0001 to $0.001, a 10x increase, how much capital is needed? Simple calculation: ($0.001 - $0.0001) × 10 billion = $9 million. Just this move alone can generate a 10x increase. More importantly, compared to a $1 million market cap, this amount of capital is already enough to shake the entire price structure.

In comparison, the amount of capital needed to push a low-priced coin higher is far less than that required for a large-cap coin. That’s why you often see crazy surges in some low-priced coins — it’s not that these coins are particularly strong, but their market cap is so small that relatively little capital can produce huge percentage gains.

**Leverage effect of capital**

At its core, this is about the leverage effect of capital. Large-cap coins have big market caps, so additional capital relative to their base is small, limiting their potential gains. Low-cap coins have small market caps, so the same amount of capital relative to their base can create astonishing percentage increases.

This explains why you often see seemingly outrageous surges on market software rankings. They’re not black swan events; rather, the market cap logic is at work. Once you understand this underlying logic of market cap, you can view various phenomena in the crypto market more clearly — from the steady but slow growth of large coins to the dramatic and extreme moves of low-priced coins.